tv Nightly Business Report PBS May 14, 2013 6:30pm-7:01pm PDT
business report with tyler mathisen and susan daily brought to you by ee street.com. multi-media tools for an ever changing financial world. our dividend stock advisor guides and helps generate income during the period of low interest rates. real money helps you think through ideas for investing and trading stocks. action alerts plus is a charitable trust portfolio that provides trade by trade strategies. on line mobile, social media. we are thestreet.com. onward and upward. new highs for stocks. new optimism for small business and less debt for american households. are the pieces in place for more
market gain? >> supply shock. oil production in north america grows at a record pace. what it means for job, the environment, geo politics. the comeback kid. how yahoo went from being an internet darling to a dinosaur and back. we have all of that and more for "nightly business report." what an incredible rally. it is a rally that does not want to quit. >> rainy days an mondays may always get you down. i know i date myself. by count on tuesdays to get you up if you're a stock market investor. today was the 18th consecutive tuesday the dow has gained this time finishing at yet another all-time high. all but four of the dow 30 finished higher led by bank of america up nearly 3%. continuing with those gains, greater optimism about the economy and then encouraging words about stocks from david
tepper. co-founder of the hedge fund appaloosa management. here's why he and a growing chorus are bullish on stocks. >> the economy's getting better. autos are better. housing is better. it's continuing to improve. they can't find enough people to work in housing is the only thing holding it back. we don't have inflation. you have utilization so you have room there. labor, unemployment is high. so you have room there. there's no inflation on the rise. we have more room to run. >> and run they did today. the blue chip dow rose 123 points closing at that new record of 15,215. the s&p 500 was also up 15 reaching a record close with 75 of its constituent companies posting all-time highs. >> joining us with where the market goes from here, shawn darby from jeffreys. shawn, let me add to the numbers of statistics that tyler just
mentioned. 178 days that the s&p has been up without anything more than a 5% correction. so does this mean that it's time for a correction? or maybe not. >> well, the market breadth has been superb. that really represents the fact that there's been ongoing buying power across the board of the stocks in the u.s. and ironically the stocks that have been favored the best have been very defensive. defensive markets don't necessarily correct that much. really what i think they're starting to see now in the equity market is quite a rotation into more real economy issues as people become much more confident about their next 12 months in the u.s. i suspect that we'll continue to make new highs and that will grind higher as people capitulate into much more riskier parts of the economy. >> shawn, i was speaking earlier today about andrew simon of jpmorgan. he mentioned that he thinks that
the dividend stock trade has gotten very crowded as investors have poured money into that particular category of the market. do you agree with that? >> well, i do. unfortunately, the evidence that we see from the fixed income market is that that trend can go on for a lot longer. last week, for example, we saw a very, very -- over 7 billion going into fixed income and credit into the u.s. which is a 2 1/2 year high. i do agree with the statement but the trend is likely still to be into that area until late start to move up. i think the your all total really for the u.s. certain for the next 12 months is real economy beneficiaries, particularly stocks benefitting from a domestic back drop rather than international growth. >> you know, i want to get back to this correction or a pull back because a lot of people are brin bracing for that other shoe is drop. what would be the trigger? what are the warning signs? >> well, i think the warning
sign would be higherd yids in the u.s. i think we're starting to see that certainly in japan, which is now recognizing that the b.o.j.'s policies have been very aggressive and that they're going to rewire inflation. i think certainly if the u.s. started to see any inflation picking up or indeed much better job growth numbers, the backup or push up in bond yields in the u.s. would start to hurt the market gains in equities. but i still think that will probably be more of a 2014 story rather than over the next couple of months. >> tell me quickly how you see the balance of supply and demand in the equity market. we've had a lot of stock buy backs out there and money in the form of the federal reserve and elsewhere coming into the market. does that force prices higher all things else being equal? >> well, i think it does. i think we've been doing quite a bit of work on this over the last 12 months and the share buy backs have also been the company buying very, very scarce amounts
of new equity issue arranges. this is being forced into equities. being forced into very defensive areas. people are chasing yield. now, of course, people have to rotate into much more sort of riskier parts. of course, unfortunately, supply has been shrinking at the same time. it's all been a very, very strong post for the equity market and i think we'll still be seeing gains going in towards the end of the year. >> that's a very upbeat way to end this conversation. thanks so much, shawn. shawn darby of jeffries company. here's something you might not expect to hear something out of washington. the budget deficit will be smaller, a lot smaller. they predict the federal budget deficit will be $642 billion. that's down more than $200 billion from the estimate in february. so why the change? well, spending cuts are one thing. higher tax revenues in part from a healthier economy are another. more companies are paying back
uncle sam for their bailout loans. >> it's not just the government getting into better financial shape but so are the rest of us. new statistics from the federal reserve show that americans are doing a lot less borrowing these days. ha ha hamt p ton pearson has more on what that means. >> reporter: households lightened their deficits by $110 billion. debt payments increased and delinquency rates fell across the board on everything from home mortgages, home equity loans and credit cards. people like bradford elder who has been on a self-prescribed diet. >> as the economy improves people are much more cognizant of the amount of debt they're taking on. what kind of debt is it? risky debt, revolving credit card debt. i think the awareness of the problem has increased. >> reporter: $986 billion in
all-time record on student debt. among those paying the proo is is kendra clayton. she is working full time attending law school at night with a debt burden to match. >> that's not something i look forward to especially being a law student, times are tough right now. you definitely want to think very smartly before you go back to school. >> reporter: total debt topped $11.2 trillion in the first quarter of this year, down from the $12.7 trillion peak in the third quarter of 2008 during the financial crisis. they say it is part of the reality check for consumers who know banks have tightened their credit standards. >> if you go back to the prebubble years where everyone was getting credit cards all over the place. they don't have that anymore. to some extent people don't have the option to borrow the way they used to. >> reporter: economists agree, less household debt is a good thing with fewer loans and credit card debt to pay, americans are free to start borrowing again to help grow the
economy. for "nightly business report" i'm hampton pearson. >> the markets got a real boost today from the latest survey by the national federation of independent business. the group's small business optimism index for april rose to its highest level since last october with a slightly better outlook on hiring and sales. >> here to shed more light on the mood of small business owners is the nfib's chief bill dunkleberg. thanks for joining us. >> nice to see you. >> based on the headline numbers in your survey, i think you would all be relatively pleased with where things are. the highest level as susie said and some of the constituents up as well. your take is notably not that way. why? >> well, 92.1 is basically 1 point above the average level of the index that we've seen since
the recovery started back in 2009. so we really haven't gone anywhere. we are really operating a very narrow range and of course going into 2008 the average level of the index was 100 and change. so we're way below the average. if you look at each of those components, there are ten components and you mentioned a few of them. they did improve a lot this time but they're still very much in recession levels. so we're really looking for a lot more from the small business sector. i mean, it is half a private gdp. it seems to be stuck in the mud. >> you heard david teppler earlier in the program. he says economy, housing, business is doing well. when you're talking to small homeowners what are they telling you about what they're going through? >> well, it is true that housing is doing well. if you look at the construction industry, it's the only industry of our ten major industry groups where more owners think the economy will be better six
months than now than think it will be worse. everywhere else we have more owners thinking six months from now the economy will be in worse shape. with that kind of a view you don't get a lot of spending or a lot of hiring. we only have 4% of the owners who think it's a good time to expand. normally in an expansion i wiyo see 15, 16, 17% have that view. nobody is borrowing money to do any of these things. >> that was one of the interesting parts. most people said their credit needs were being met. they weren't going to borrow. they weren't going to expand. they are a he a little more optimistic, i guess, about the conditions six months from now but they're certainly not taking on lots of expenditures to grow or to hire or to raise the wages they pay, right? >> that's right. we're at a nice 6 point increase in the job creation percentage, but it was an increase from net zero planning to increase total employment. that's not good. we have a net zero% planning to add to inventory.
orders aren't going up to those manufacturing firms who like to produce this stuff. 4% think it's time to expand, a terrible number. we had a two point decline in those who were making capital outlays that we would normally finance and that we need to raise worker productivity. so it's still kind of a grim picture. if you look at the profitability of this half of the economy, we're glad that these aren't publicly traded companies because the economy is clearly very bad. big firms are doing well. record profits, record stock market. the small firms are stuck in the mud. >> on that note we have to leave it. bill dunkleberg is the chief finance officer. we begin with dell and its leaks. reports surfaced that profits would come in well below expectations so that prompted the company to move up its report to thursday. dell shares seesawed with the
news closing at $13.47. it was down a fraction. blackberry unviewed a new roll call phone call called q 5. the company announced a free version of blackberry messenger that would work with android and ios operating systems. they were disappointed with the news that the keyboard q 10 is being pushed back to june or litter. shares had gained up to the news events but dropped on that q 10 news losing almost 4% to $15.25. a power group led the s&p 500 gainers for most of the day. they said university of phoenix was in line for a ten year rearm if i have mags. apollo shares jumped and they finished at $20.49 on more than double the volume. when angelina jolie revealed her decision to undergo a double mastectomy, 34ir riad genetics
rose to a high. they confirmed that jolie contained the brocca gene for breast cancer. they say that risk will generally cover the $3,000 cost of the test. myriad shares were up as much as 4% today also on double the normal volume before closing at $34.10, up almost 3%. and still ahead, will surging oil production in the u.s. solve our nation's energy problem and lower prices for you at the pump? but first we have the international markets.
good news today about energy. there's an oil boom right here in the u.s. the international energy agency says a supply shock created by a surge in north american oil production will meet rising demand for energy over the next five years. because of all of that, domestic oil, opec will not have to increase output in the next five years. meanwhile, crude oil fell by almost $1 closing at $94 and change. our next guest says that energy report is promising. he's john felmy. welcome. >> good evening. thanks for having me. >> do you see as the ieac, a united states that will be independent by 2030 and may be the largest producer of oil even greater than saudi arabia sooner than? ? >> there's no question it can. between imports from canada and biofeels we can become energy
self sufficient. that means a lot in terms of energy security, jobs and revenue for the government. >> you know, our viewers might be wondering that if things are so good on the energy front why aren't we seeing gasoline prices coming down. you know, what's going on there? >> well, it's still a tight world market. while the iea did reduce its demand growth, it's sitting at record levels. while the u.s. increased its production the most ever, we haven't seen a lot of production worldwide. as long as demand continues to grow more than supply, you have a tight market. >> prices are lower at the pump than they were at this time a year ago. they are higher, however, than they were just a few weeks ago. why are prices rising a little bit when the price of crude, as we just said, is actually coming down a little bit? >> well, it has come down the past couple of days, but prior to that the price of crude oil went up about 20 cents a gal. ethanol prices went up about 30 cents a gallon and we moved into
the sr variety that is more expensive to produce. >> tell us a little bit more about supplies getting to the end user. so we're producing a lot more. do we have the infrastructure of the pipe lines and other necessities to get the oil to where it has to go? >> well, if we're going to expand production by the amount that i just talked about, you're going to need more infrastructure but you're going to also need more policy in terms of access policy, tax policy and regulatory policy. it's a combination of all of those things. >> obviously the production of oil from off shore sources, such things as the keystone pipeline and the fracking are very contentious issues in this country among those who favor the production. they say it's a jobs issue and those on the other hand who say there are major environmental risks here. how can we hit the balance right, get the jobs we need, get the natural resources we need and protect the environment? >> most important thing we can do is educate folks on what the
reality of energy is versus the rhetoric. we've had an enormous amount of campaign. we've had opposition to the keystone pipeline that doesn't make any sense in terms of economics and environment. we have to educate folks on the reality versus rhetoric. >> let me just go back to that point that tyler brought up at the beginning of our conversation that the u.s. will become more powerful in the world in terms of producing more oil than saudi arabia. what does this do to who's going to be calling the shots from here on out. opec has been dictating the price of oil. >> there's no question, all other things being equal increasing supply helps consumers. when you have a cartel that is composed of 40% of the world oil market, they have a lot of power. if that amount declines significantly, they've got less ability to influence prices. >> and therein is the change of geopolitics that we referenced at the top of the show. coming up in our program, why honeybees are disappearing
do. they're proposing that the japanese conglomerate spins off part of it. a hollywood studio and music label in an initial public stock offering. sony does make home electronics and has a finance and insurance division, who knew, said that its businesses are just not for sale. u.s. shares of sony were higher today. they have been successful shaking up other tech companies like yahoo. he helped bring in its current ceo. since marissa mayer took over yahoo stock has soared. tonight as we continue our week-long series on comeback companies, john takes a look at yahoo!'s turn around and mayer's role in that revival. >> yahoo!, it's one of the defining companies of the internet era, but a year ago it had nearly fallen apart. it chewed up four ceos in as many years, cert share was
dropping, parking lots took too long to fill in the morning, a sign of flagging morale. then new ceo marissa mayer came on board. >> what a difference ten months makes. new ceo, new game plan and suddenly yahoo! is a place people want to come to work. take a look at the home page that's been redesigned with the hope that users will spend more time there. >> people said give me a reason to come back to yahoo! a few times a day. now the content is always updating. iphone apps like weather have gotten a face lift. that app got more downloads in five days than her team had expected for the entire quarter. a main goal for these changes, make yahoo! cool again. that will be a long slog. even users in silicon valley know that. >> some people are more tech savvy that i don't have gmail or something else. almost like yahoo! is a little bit more old-fashioned. it works for me. >> reporter: investors already seem to be convinced some cool factor is back. the stock is up 70% since mayer
took over. kohler says yahoo! i getting back street cred. >> i've known marissa for a long time and i knew her at google. one of the things she always did extremely well at google, what she's doing at yahoo!, too, is building teams and hiring people. >> reporter: still, a lot of questions loom ahead. can yahoo! grow its bank and adebayor business. are investors mostly bidding up the stock and trying to get the chinese commerce business, alibaba? >> reporter: people are valuing alibaba and expecting the ipo to hit. the valuation that they're throwing out for this company i think are going to prove to be too optimistic. >> reporter: maybe, but investors are optimistic about yahoo!. that's something we haven't been able to say for a long time. for "nightly business hn fort.
tomorrow we continue our series, comeback companies, with a look at insurance giant's aig's turn around. finally tonight, what's happening to all the honeybees. a surprising drop in the world's honeybee population is raising fears about a real threat to our nation's food supply. jane wells has more on what all the buzz is about. >> reporter: these are california. this is a multi-billion dollars industry. 60% of all u.s. commercial bee colonies came here to pollen nate the crop and it was a challenge. >> this is probably one of the most challenging years for the beekeepers to provide the supply of bees that we need. the commercial beekeepers that do commercial poll lynn nation, they were tapped out. >> reporter: paramount farming company is the largest grower of california al monlds.
>> see them? those are mites. those are the pair a sites that are killing our bees. >> reporter: they pollinate 20 to $30 billion worth of food but last year nearly 1/3 of the bees died off, much higher than normal, as what's being called colony collapse individual. >> that is a drone. >> reporter: they say beekeepers blame the deaths on many things, pair a sites, pesticides, the midwest drought but most say bees are just plain starving to death. urban mization and large farms have replaced a lot of traditional bee foods. >> we've converted a lot of the lands into places where bees can't find food anymore so they're just plain short on food. >> queen bees are not living as long as they used to. adult bees are more challenge the than they ever have been before. it's not one thing. >> reporter: what to do about it? beekeepers and farmers are working together to plant
flowers and other bee food in open spaces. in europe they may ban pesticides considered harmful to be bees. bottom line, it will take longer, be more difficult and cost more. for "nightly business wells" i'm jane wells in california's central valley. of all the things we have to worry, there's drought, flooding and a shortage of honey bees that may affect what we faye for our vegetables and fruits. >> i've got to say, jane, she's the queen bee. i don't know how she did that story. >> life on the b list. that's "nightly business report." i'm susie garrett. >> i'm tyler mathisen. hope to see you right back here tomorrow night. >> announcer: "nightly business report" has been brought to you by estreet.com. multi-media tools for an ever changing financial world. our dividend stock advisor